Help with NISA compound interest calculation

[Beaglehound]

How are Japanese stocks and bonds not Japanese?

I worded that poorly. I was giving examples of investments which are Japanese. See Zeroshiki’s post above for explanation.

[Tkydon]

3% seems pretty conservative over 21 years, by the way. But with the yen as weak as it is now, who knows what we'll get in yen terms?

I don't really understand how the yen being weak or strong will affect this?
I will be earning yen, saving yen, and come retirement, withdrawing yen.
I don't plan on converting anything to a different currency....

If you buy Mutual Funds or ETFs that invest in overseas assets, then the Fund Manager takes your Yen, converts it to Foreign Currency at the exchange rate when you put the money in, and buys the overseas assets.
When you sell, the Fund Manager will sell those assets, convert the proceeds back to Yen at the exchange rate when you take the money out, and transfer the Yen to you.

The Yen is very weak right now, so if you are dollar cost averaging, your Yen won't buy many units of the foreign asset right now, but will buy relatively more as the Yen strengthens. You will make more gain if you buy when the Yen is stronger, so you probably want the Yen to strengthen while you are in the buying, or accumulation phase, and weaken again when you come to sell...

[Roger Van Zant]

I thought about this last night and played around with some numbers. I understand now.
Still, even though the yen is weak, I will continue buying my eMaxis Slim each month, because….the alternative is just to leave it sitting in my bank account.
Were you suggesting that because the yen is weak at the moment, it’s better to hold off investing in any mutual funds?

[sutebayashi]

My two yen, is you ought just keep investing monthly.
Who knows when the yen weakness might end - or if, even.

[northSaver]

… the alternative is just to leave it sitting in my bank account.

Or buy Japanese stocks, bonds, REITs, investment property, businesses, etc. to remove the currency risk (but add a few other risks so this is not really a recommendation).

Were you suggesting that because the yen is weak at the moment, it’s better to hold off investing in any mutual funds?

No. You should do what you were suggesting. The only concern in my opinion is lump summing in January 2024 if the yen is still very weak. Is it better to spread it throughout the year? That's the question a lot of us here will be asking ourselves nearer the time. There is no right or wrong answer of course, because no one has a crystal ball. It boils down to a personal decision... and then luck.

[adamu]

I think selling existing investments is a distraction. It's going to encourage you to do market timing, expose you to risk of being out of the market, and distract from the much simpler, more important, and beneficial habit of regular saving.

The only concern in my opinion is lump summing in January 2024 if the yen is still very weak. Is it better to spread it throughout the year? That's the question a lot of us here will be asking ourselves nearer the time.

So it begins

[tbsmj]

Is it even possible to lump sum an entire year's worth of New NISA? I somehow pieced out that you could only do that for the growth portion (2.4m), but that the tsumitate portion (1.2m) had to be filled in monthly installments. Was that a misunderstanding on my part?

[Beaglehound]

Is it even possible to lump sum an entire year's worth of New NISA? I somehow pieced out that you could only do that for the growth portion (2.4m), but that the tsumitate portion (1.2m) had to be filled in monthly installments. Was that a misunderstanding on my part?

I thought the same, but could be wrong…

[Tkydon]

Is it even possible to lump sum an entire year's worth of New NISA? I somehow pieced out that you could only do that for the growth portion (2.4m), but that the tsumitate portion (1.2m) had to be filled in monthly installments. Was that a misunderstanding on my part?

I think that is correct. You can put the Growth Portion or add to it at any time if you have any allowance left, but the Tsumitate Portion you would need to Tsumitate - pay in monthly, and possibly use bonus payments to top up if you have any allowance left.

[TBS]

Is it even possible to lump sum an entire year's worth of New NISA? I somehow pieced out that you could only do that for the growth portion (2.4m), but that the tsumitate portion (1.2m) had to be filled in monthly installments. Was that a misunderstanding on my part?

Assuming the Tsumitate part of New NISA works like the current tNISA (in particular SBI/Rakuten/Monex's bonus payment function works the same), you should be able to front-load the tsuimate portion with say 1,188,000 yen via a bonus payment, then tsumitate just 1,000 yen for the following 12 months. That will effectively allow you to lump sum an entire year's worth (3.6m) from the get-go:

https://www.toushikiso.com/tsumitatenisa/ikkatu.html